A Market Equilibrium Is Only Efficient If

question 13

Multiple Choice

A market equilibrium is only efficient if:

• A)the consumer surplus and the producer surplus associated with a given transaction are equal.
• B)consumer surplus and producer surplus are both zero.
• C)all relevant costs and benefits are reflected in the market supply and demand curves.
• D)output is distributed equitably among consumers.

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Definitions:

Exact Simple Interest

Refers to interest calculated precisely on the principal amount of a loan or investment, without compounding, over a specific time period.

365-Day Year

A method of interest calculation that uses a full calendar year to determine the amount due.

Loan Period

The duration of time from the initiation to the full repayment of a loan.

Exact Simple Interest

A method of calculating interest that uses a base of 365 days per year, ensuring accuracy based on actual calendar days.